Maryland unemployment overpayments exceed $436 million

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Posted at 6:00 AM, Aug 25, 2021
and last updated 2021-08-25 06:00:49-04

BALTIMORE — The State of Maryland overpaid unemployment insurance claimants more than $436 million since the start of the pandemic, according to data provided to the U.S. Department of Labor.

From April 1, 2020 through June 30, 2021 there were 111,232 overpayment cases totaling $436,664,849.

Of the $436 million in overpayments, $431 million or nearly 99 percent was considered non-fraudulent.

The most common reason for a non-fraudulent overpayment was “other error,” amounting to $46 million.

Data on reasons for non-fraudulent payments was only available for the regular unemployment insurance and Pandemic Emergency Unemployment Compensation (PEUC) programs.

The Maryland Department of Labor issued $5 million in fraudulent overpayments.

During that same timeframe, the Department recovered nearly $12 million in fraudulent overpayments and close to $35 million in non-fraudulent payments.

Of the $13.5 billion in benefits the Maryland Department of Labor has paid out since August 7, overpayments account for 3.2 percent of that total.

A spokeswoman with the Department of Labor told WMAR-2 News Mallory Sofastaii that the vast majority of overpayments are from the PUA program because of the federal requirement to provide proof of income documentation. She added:

Many claimants either did not upload documentation when prompted through an action item in their BEACON portal or provided documentation that showed income lower than provided in estimates on their initial claim application.

As a result, their weekly benefit amount was recalculated and an overpayment resulted. When an overpayment is established, the claimant receives an overpayment notice that explains why they have an overpayment. These claimants can upload new documentation and have their weekly benefit amount redetermined. They can also appeal the overpayment and apply for a waiver.

The department is not collecting on overpayments and is currently accepting overpayment waiver applications.

RELATED: Jobless workers overpaid $77 million may be eligible for a waiver to avoid paying it back

Claimants may be eligible for overpayment waivers
Recently, claimants for federal pandemic unemployment programs were notified that they may be eligible for an overpayment waiver.

The Department sent notifications to approximately 85,000 claimants notifying them that they may be eligible if the overpayment wasn’t fraudulent and if claimants can show that repaying the amount would cause financial hardship, be unconscionable under the circumstances, or because claimants were expecting the payment, they gave up a valuable right or changed positions for the worse.

Overpayments are a nationwide issue
According to a report by the Government Accountability Office, the U.S. Department of Labor found $12.9 billion in overpayments had been made from April 2020 through March 2021, including:

  • $4.3 billion in regular UI and Extended Benefits overpayments
  • $4.6 billion in PUA overpayments
  • $0.2 billion in PEUC overpayments
  • $3.8 billion in FPUC overpayments

Other states have also reported significantly high overpayments.

Eye on Ohio, a nonprofit, nonpartisan Ohio Center for Journalism, reported the state has made over $2 billion in overpayments.

In Wisconsin, the Department of Workforce Development reportedly overpaid claimants $66.9 million in 2020.